Number
031162
Version
SUBSTITUTE 1
Reference
Sponsor
THE CHAIR
Title
Substitute resolution authorizing the amendment of City of Milwaukee Industrial Development Revenue Bonds (Accurate Metal Products, Inc. Project) Series 1999.
Analysis
In 1999, the City issued $1,000,000 of tax-exempt industrial development revenue bonds to provide financing for the acquisition, renovation and equipping of an industrial facility located at 8165 West Tower Avenue. The bonds were issued on behalf of AMP Properties LLC, which owns the facility and leases it to Accurate Metal Products, Inc. This substitute resolution makes certain technical changes to the terms of the bond issue, including the amortization schedule and the interest rate. As with all industrial development revenue bonds, the City serves as a conduit for this form of lower-cost financing, but does not guarantee payment on the debt.
Body
Whereas, The City of Milwaukee, Wisconsin (the "Municipality"), is a municipal corporation organized and existing under and pursuant to the laws of the State of Wisconsin and is authorized by Section 66.1101, Wisconsin Statutes, as amended (the "Act"):
(a) To issue industrial development revenue bonds to finance all or any part of the costs of the construction, equipping, reequipping, acquisition, purchase, installation, reconstruction, rebuilding, rehabilitation, improving, supplementing, maintaining, repairing, enlarging, extending or remodeling of a project which qualifies under the Act and the improvement of the site therefor.
(b) To enter into a revenue agreement with an eligible participant pursuant to which the eligible participant agrees to cause said project to be constructed and to pay the Municipality an amount of funds sufficient to provide for the prompt payment when due of the principal of and interest on said industrial development revenue bonds; and
Whereas, Pursuant to a Resolution (the "Bond Authorizing Resolution") adopted by the Common Council of the City of Milwaukee, Wisconsin (the "City"), on September 7, 1999, the Loan Agreement by and between the City and AMP Properties, LLC (the "Borrower"), dated as of September 1, 1999 (the "Loan Agreement") and an Indenture of Trust by and between the City and Marshall & Ilsley Trust Company N.A. (formerly known as M&I National Trust Company)(the "Trustee"), dated as of September 1, 1999 (the "Indenture"), the City issued its $1,000,000 Industrial Development Revenue Bonds, Series 1999 (Accurate Metal Products, Inc. Project)(the "Bonds"), to provide tax-exempt financing for a project described in the Loan Agreement; and
Whereas, The Bonds were purchased by M&I Marshall & Ilsley Bank (formerly known as M&I Northern Bank)(the "Original Purchaser"); and
Whereas, As of December 1, 2003, $910,000 of the Bonds are outstanding and the Original Purchaser owns 100 percent of the outstanding Bonds; and
Whereas, The Borrower and the Original Purchaser have requested that the Loan Agreement, the Indenture and the Bonds be amended to reflect a modification of the interest rate; and
Whereas, The City has determined and finds that it is proper, necessary and desirable to approve amendment of the Indenture and the Bonds, all as more fully described in the First Amended Indenture defined below; and
Whereas, The amendment will comply with the requirements of the Act and will further the public purposes served by the issuance of the Bonds under the Act; and
Whereas, Drafts of the following documents, copies of which are attached to this Common Council File, are now before and have been reviewed by this Common Council:
(a) The First Amendment to Indenture of Trust (the "First Amendment to Indenture"), proposed to be entered into between the City and the Trustee.
(b) The Amended and Restated Bond; and
Whereas, The Common Council deems it necessary and desirable to authorize the execution and delivery of the First Amendment to Indenture and the replacement Bond; and
Whereas, It is necessary for the Common Council to authorize the execution and delivery of other certificates, documents, instruments and papers and the performance of acts necessary or convenient in connection with the amendment of the Bonds and the implementation of this Bond Resolution; and
Whereas, The Act and all agreements to be signed by the City provide that the Bonds shall not constitute nor give rise to a general obligation of the City to be a charge against its taxing powers and that the Bonds will be payable only from the revenues and receipts derived from the Loan Agreement and the Note and secured by the pledge and assignment under the Indenture of such revenues and of the Note of the Borrower in the same principal amount as the aggregate principal amount of the Bonds; and
Whereas, Capitalized terms not otherwise defined herein shall have the meaning given such terms in the Bond Authorizing Resolution; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, as follows:
Section 1. Incorporation of Preambles. The preambles are incorporated into this Bond Resolution by this reference and made a part of this Bond Resolution.
Section 2. Authorization of Amended Indenture and Amended and Restated Bonds. The First Amendment to Indenture and the Amended and Restated Bonds are hereby authorized by the Common Council.
Section 3. Terms of the Amended and Restated Bonds. The terms of the Amended and Restated Bonds shall be as set forth in this Bond Resolution.
The Amended and Restated Bonds shall be issued in the aggregate principal amount of $1,000,000, shall become due and payable on September 1, 2019, and shall be designated:
CITY OF MILWAUKEE, WISCONSIN, INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1999 (Accurate Metal Products, Inc. Project)
As used herein, the following terms shall have the following respective meanings:
"Bank's Federal Tax Rate" shall mean the tax rate at which the Original Purchaser, or any other bank that is the registered Bondowner, would be taxed for federal income tax purposes pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), or any future United States internal revenue or similar laws applicable to such bank, if its taxable income were in the highest tax bracket specified by the Code.
"Initial Rate of Interest" shall mean a rate of interest per annum equal to 6.50 percent per annum and shall be applicable for the period from September 21, 1999, the original issue date of the Bonds, through and including December 31, 2003.
"First Amended Interest Rate" shall mean a rate of interest per annum equal to 4.00 percent per annum and shall be applicable for the period from January 1, 2004, the original issue date of the Bonds through and including August 31, 2006.
"LIBOR/SWAP Rate" shall mean the rate of interest per annum determined by the Original Purchaser, or any other bank that is the registered Bondowner, based upon information from the Reuters Screen LIBOR Page (or a comparable service providing such information) on the fifth business day preceding the Reset Date for the applicable Reset Period. The Bank currently uses the Reuters Screen LIBOR Page to provide information with respect to the interbank Eurodollar market, but the Bank may change the service providing such information at any time.
"LIBOR/SWAP Rate of Interest" shall mean a rate of interest per annum, determined on the applicable Reset Date for the Reset Period selected by the Borrower, calculated as follows: [(LIBOR/SWAP Rate for selected Reset Period plus 1.9 percent) multiplied by (1.0 - Bank's Federal Tax Rate)] plus [(LIBOR/SWAP Rate for selected Reset Period) multiplied by (Bank's Federal Tax Rate)].
"Reset Date" shall mean the date on which the Borrower resets the fixed interest rate on the Bonds based upon the then expiring Reset Period previously chosen by the Borrower, which Reset Date shall always be on a September 1. The first Reset Date shall be September 1, 2006.
"Reset Period" shall mean one or more annual periods of time not to exceed seven years.
The Bonds shall be dated the date of their original issuance and shall mature in installments on September 1 of each year in the years and principal amounts as follows:
Year - Amount
2003 - $70,000
2004 - $80,000
2005 - $80,000
2006 - $55,000
2007 - $55,000
2008 - $55,000
2009 - $55,000
2010 - $55,000
2011 - $55,000
2012 - $55,000
2013 - $55,000
2014 - $55,000
2015 - $55,000
2016 - $55,000
2017 - $55,000
2018 - $55,000
2019 - $55,000
The Bonds shall bear interest from the date of their original issuance through and including December 31, 2003 at a fixed rate equal to the Initial Rate of Interest. On January 1, 2004, the Bonds shall bear a fixed interest rate equal to the First Amended Interest Rate. On September 1, 2006, the first Reset Date and each Reset Date thereafter, the Bonds shall bear a fixed interest rate equal to the LIBOR/SWAP Rate of Interest. Interest shall be payable commencing on December 1, 1999 and quarterly thereafter on the first day of March, June, September and December of each year.
The Bonds shall be issued as fully registered Bonds in such denominations and transferable as provided in the Indenture. The Bonds shall be issued in the form therefor as set forth in the Indenture, with such insertions therein as shall be necessary to comply with the terms of this Resolution and with such corrections therein, if any, as the approving bond attorney may require for conformity with the terms of this Resolution, the Indenture and the Act.
Section 4. Limited Liability. The Amended and Restated Bonds and the interest and redemption premium (if any) thereof do not and shall never constitute a general obligation or an indebtedness of or a charge against the general credit or taxing power of the City, but are limited obligations of the City payable solely from revenues and other amounts derived from the Loan Agreement and secured only by the pledge and assignment under the Indenture to the Trustee of such revenues and of the Loan Agreement, the Note, the Indenture and the Bonds are on file in the office of the City Clerk for public inspection and are by this reference incorporated into this Bond Resolution.
Section 5. Replacement Bonds; Delivery. The Mayor, the City Clerk and the City Comptroller are hereby authorized and directed to execute, attest and seal the Amended and Restated Bonds on behalf of the City and to deliver the Amended and Restated Bonds to the Original Purchaser.
Section 6. Agreement. In order to provide for amendment of the Indenture, the Mayor and City Clerk shall execute, acknowledge and deliver in the name and on behalf of the City the First Amendment to Indenture and the Amended and Restated Bond in substantially the forms submitted to this Common Council, which are approved in all respects.
Section 7. General. The Mayor and City Clerk and other officials and employees of the City are each authorized and directed, in the name and on behalf of the City, to execute any and all matters, and do any and all things deemed by them necessary or desirable in order to carry out the purposes of this Bond Resolution (including the preambles hereto). The Mayor and City Clerk shall execute and deliver the First Amendment to Indenture and the Amended and Restated Bonds in substantially the respective forms presented to the Common Council, with such changes in such agreements as shall be approved by the officials executing them, their signatures to evidence their approval of the final forms of such documents.
Section 8. Ratification of Proceedings. All proceedings, resolutions and actions of the City and its officials and agents taken in connection with and in furtherance of the issuance of the Amended and Restated Bonds, the acquisition, construction, rebuilding, improvement and extension of the Project and the financing of the Project are ratified, confirmed and approved.
Section 9. Effective Date. This Resolution shall be effective immediately upon its passage and approval. To the extent that any prior resolutions of the Common Council are inconsistent with the provisions hereof, this Resolution shall control and such prior resolutions shall be deemed amended to such extent as may be necessary to bring them into conformity with this Resolution.
Drafter
DCD:JS:js
12/09/03